(Alliance News) - Aviva PLC on Monday announced its pending acquisition of vehicle replacement insurance company Optiom O2 Holdings Inc, from Novacap and other minority shareholders.

The London-based insurance company said it will acquire Calgary, Alberta-based Optiom for consideration of around GBP100 million, or about CAD170 million. The transaction, Aviva said, is consistent with its current capital management framework.

Optiom was founded in 2008 and has since become Canada's largest vehicle replacement insurance provider, licenced across all provinces and territories excluding Quebec.

Aviva added that buying Optiom will expand its capital-light business and grow its presence in Canada, allowing it to reach additional customers thanks to Optiom's strong distribution relationships.

"As an existing underwriting capacity provider for Optiom, the transaction provides an opportunity for Aviva Canada to increase its access to an attractive line of business, while securing a stable, growing stream of distribution income," the company said.

Aviva expects the acquisition to close during the first quarter of 2024.

"The acquisition strengthens our offering and distribution capabilities in a highly attractive segment of the Canadian insurance market," commented Tracy Garrad, chief executive officer of Aviva Canada. "We know Optiom well through our existing relationship and are excited about what we can do together to better serve our brokers and customers."

Shares in Aviva were down 0.1% at 424.40 pence each in London on Monday morning.

By Emma Curzon, Alliance News reporter

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